The Role of Direct Mail in Philanthropy Marketing

Transcription

1 The Role of Direct Mail in Philanthropy Marketing Wayne Gurley President & Creative Director Allegiant Direct, Inc. Brentwood, TN

2 The Allegiant Direct Philosophy: Developing a Successful Contact Strategy Direct marketing serves as a lead generation program for major and planned gifts. A cultivation process moving a person from firsttime gift to a major or planned gift.

3 The Allegiant Direct Philosophy: Developing a Successful Contact Strategy Not annual giving (once a year), but current, regular, repeat giving Getting donors to their long-term value as quickly as possible

4 Direct Marketing A Numbers Game Major Donors & Planned Giving Donors (20% give 80%) Mid-Range Donors Entry Level Donors (80% give 20%)

5 Years of Giving Between 1 st Gift and 1 st Five-Figure Gift ($10,000+) (Source: Target Analysis Group/Blackbaud) 1-2 Years 10% 3-5 Years 12% 6-8 Years 13% 9-12 Years 20% 13+ Years 45%

6 What Was the Size of a Five-Figure Donor s First Gift? $1 - $24 18% (second largest %) $25 - $49 14% $50 - $99 15% Under $100 47% (total of above)

7 What Was the Size of a Five-Figure Donor s First Gift? $100 - $249 23% (largest %) $250 - $499 8% $500 - $999 4% Under $1,000 82% (total of above)

8 What Was the Size of a Five-Figure Donor s First Gift? $1,000 - $2,499 7% $2,500 - $4,999 3% $5,000 - $9,999 2% $10,000 - $24,999 5% $25, % $1, % (total of above)

9 Your goal should be to maximize Donor Long Term Value (DLTV) Move donors from Point A (first-time gift) to Point Z (a major or planned gift.)

10 A few DLTV givens: Average worth per donor is $1,000 - $2,000. This figure includes all lifetime income from individuals, including planned giving. (Does not include foundation grants or corporate support.) Best age demographic for fundraising is 65+. Average life of a direct mail donor is 7 years, so you don t have a lot of time to move them from A to Z.

11 Case Study: Donor Long Term Value Analysis Martin Memorial Foundation/Stuart, FL Years of Giving Total Lifetime Income From Individuals # of Individuals Responsible for Total $$$ Average Worth Per Donor 30 $141,000,000 27,840 $5,065

12 Case Study: Martin Memorial Foundation/Stuart, FL 13-year history of direct mail Historically did 2 appeals, fall & spring Lacked accurate data and analysis No focus on pipeline/attrition rate Excellent donor relationships Strong culture of philanthropy

13 Case Study: Martin Memorial Foundation/Stuart, FL Starting in FY 2008: Increased mail to patients Began systematic testing Added a Fall follow-up appeal to donors; added Doctors Day mailing in February Launched Foundation Hot Sheet Added LYBUNT mailings

14 Direct Mail Results Martin Memorial Foundation/Stuart, FL $250,000 $216,956 $222,484 $200,000 $190,855 $196,675 $196,080 $156,437 $150,000 $100,000 $50,000 1,273 donors 1,254 donors 1,917 donors 1,897 donors 1,592 Donors 1,116 donors $0 FY2008 FY09 FY2010 FY2011 FY2012 FY2013 YTD * fiscal year ends 9/30

15 Focus on LYBUNTS Wanted to address high attrition rate Letters produced in-house

16 LYBUNT Results Fiscal Year # mailed # gifts % response $ raised Avg. gift Cost/donor 2009 (Aug) % $13,115 $180 $ (Aug) 1, % $12,235 $ 97 $ (Jan) % $ 6,455 $ 92 $ (Aug) 1, % $ 7,708 $ 63 $ (Jan) % $ 3,245 $ 55 $ (Aug) 1, % $ 5,420 $ 42 $4.19 Cost/donor = cost to recapture each donor High average gift makes this worthwhile

17 Lapsed Donor vs. Variable Paragraph Copy Test Audience Lapsed 2-3 Year Donors (IVUS Letter) Lapsed 2-3 Year Donors (LYBUNT Letter) Pieces Mailed # gifts % response $ raised Avg. gift CP$R 1, % $723 $45.19 $1.08 1, % $1,130 $66.47 $0.69

18 Foundation Hot Sheet 1 piece of paper, done in-house, down & dirty Mailed 10+ times/year to $100+ donors, all coded MG prospects, other lists as necessary Current, quick, can be customized for different uses (i.e. all-doctor edition, event edition, impact reports) Drives donors to website no BRE included (we tested) The UN-solicitation

19 Annual Giving: A Flawed Concept Concept of annual giving comes from college & university fundraising. Perpetuates the mindset that you will only ask for support once a year Assumes you will only get one gift per year from donors Does not promote an environment in which multidonors can be cultivated

20 Problems with Annual Giving Creates extremely high attrition rates Puts enormous pressure on organization s donor acquisition efforts to replace donors who lapse and grow the donor base at a reasonable annual rate

21 Donor Attrition Chart: 20% rate over 5 years Donors 1 Year 2 Years 3 Years 4 Years 5 Years 1, ,500 2,000 1,600 1,280 1, ,000 4,000 3,200 2,560 2,048 1,638 10,000 8,000 6,400 5,120 4,096 3,277

22 Donor Attrition Chart: 40% rate over 5 years Donors 1 Year 2 Years 3 Years 4 Years 5 Years 1, ,500 1, ,000 3,000 1,800 1, ,000 6,000 3,600 2,160 1,

23 Donor Attrition Chart: 60% rate over 5 years Donors 1 Year 2 Years 3 Years 4 Years 5 Years 1, ,500 1, ,000 2, ,000 4,000 1,

24 Annual Goals Annual Donor Renewal Rate of 60% - 80% Annual Donor Attrition Rate of 20% - 40%

25 Direct Mail Results What Can You Expect? (Industry Standards) New Donor Acquisition response: 1% - 2% New donor acquisition average gift: Low: $15 - $25; High: $50 - $60 (depending on the ask ) New Donor Acquisition CP$R: $1.00 (break-even) to $3.00 or possibly more

26 Direct Mail Results What Can You Expect? (Industry Standards) Active Donor Renewal response: 5% - 15% Active Donor Renewal average gift: Can vary from low of $25 to $100+ Active Donor Renewal CP$R: $.01 - $.50 Lapsed Donor Renewal response: 2% - 3% Lapsed Renewal average gift: (Same as above.) Lapsed Donor Renewal CP$R: $.30 - $1.00

27 Getting the First Gift Entry-level audition gift Was the donor thanked? Was gift properly acknowledged? Was it acknowledged quickly? (within hrs.) Was the donor told that his/her gift was put to good use as intended and that it is having the desired effect?

28 Getting the Second Gift Extremely important! 50% of first-time donors never give again 80% of donors who make a second gift will give again

29 Suggested remedies for high donor attrition rates Thank donors promptly with a letter, and preferably, with a phone call. Mail a Welcome on Board Package. Within a few weeks, make another phone call thanking them again, and put the idea of making a second gift into their head by mentioning a matching gift and asking them if they mind receiving info.

30 Suggested remedies for high donor attrition rates Send a postcard inviting donors to participate in a webinar or telephone conference with a senior member of your organization who would agree to discuss issues you are facing or needs (such as new technology or treatment procedures for a hospital). Should be roughly 30 minutes with time for questions and answers at the end.

31 Renewal at Birth Membership/Giving Clubs Comes from subscription fulfillment industry Designed to reduce number of 1-year lapsed donors and generate higher renewal rates and average gifts Ask comes soon after first gift, when donors are most satisfied with their decision to give

32 Goals of Membership/Giving Club Get donors to give a second gift Get donors to give multiple gifts over course of the year Get donors to give cumulatively larger gifts than they would without the structure of membership Get donors to their long term value as quickly as possible

33 Don t worry about asking too often. Your job is to ask. Your donor s job is to give. Resist the temptation to make this decision for your donors by limiting the number of times you solicit them. Your donors will tell you by the number of gifts they give how often they wish to give.

34 Word have meaning Consider changing the name of your program to something that is more conducive to encouraging multiple annual gifts, such as Current or Sustained Giving. Project a different reality in your own mind and also in the mind of your donor.

35 Remember If you think you are protecting your donors by not mailing to them so they will be more inclined to give to you, you are sadly mistaken. If you aren t mailing to your donors, some other organization is. Your Lapsed Donors are Active Donors for some other charity.